| Chapter 1 - Homework Assignment |
| ABC Corporation acquired ZYX Company’s net assets on March 1, 2016. ABC Corporation paid $158,000. The balance sheet and fair value information for ZYX Company immediately before the acquisition is shown below. |
| 1) | Prepare the acquisition journal entry for ABC Corporation. | | | | | | | | | 15 pts |
| 2) | Prepare the acquisition journal entry for ZYX Company. | | | | | | | | | 15 pts |
| 3) | Prepare the acquisition journal entry for ABC Corporation assuming it acquired all of ZYX's common stock for $158,000. | | | | | | | | | 5 pts |
| 4) | Assume that ABC Corporation incurred $25,000 in legal fees related to the acquisition. What is the journal entry to record these fees? | | | | | | | | | 5 pts |
| 5) | In your own words, explain some of the reasons ABC Corporation may have decided to acquire ZYX Company. (200 words or less) | | | | | | | | | 10 pts |
| | | | | | | | ZYX Company |
| | | Balance Sheet Data: | | | | | Book Value | | Fair Value |
| | | Cash | | | | | 30,000 | | 30,000 |
| | | Accounts Receivable | | | | | 25,000 | | 25,000 |
| | | Inventory | | | | | 25,000 | | 40,000 |
| | | Patents | | | | | 35,000 | | 45,000 |
| | | Buildings and Equipment | | | | | 215,000 | | 95,000 |
| | | Less: Accum. Depreciation | | | | | (150,000) |
| | | Total Assets | | | | | 180,000 | | 235,000 |
| | | Accounts Payable | | | | | 35,000 | | 35,000 |
| | | Notes Payable | | | | | 100,000 | | 100,000 |
| | | Common Stock: |
| | | $10 par value | | | | | 15,000 |
| | | Additional Paid-In Capital | | | | | 5,000 |
| | | Retained Earnings | | | | | 25,000 |
| | | Total Liabilities and Equities | | | | | 180,000 |
COURTMCLARKE777
hw_1.xlsx
